The money traps you should avoid (IV)

We have discussed various financial traps in this series. We start with some that are completely legal and legitimate, but that we must be careful of if we do not want to lose focus on what is important. And we are done with other very frequent, fraudulent traps designed to steal our resources. Let’s continue with them:

7. Win a “contest” that we did not enter. These are usually phone scams: they apparently call from a radio station saying we won a contest. Sometimes they tell us that we are live, of the program “X” that we have surely heard. The prize is usually attractive: a car or similar. Then they tell us not to hang up, to give us directions to get the award. All of this is done to get us hooked. Then, with the phone in hand, without hanging up, they ask a nearby convenience store to buy prepaid cell phone cards. We have to give them the codes that come in them to “unlock” the prize. There they hang, getting their profit.

There are other similar schemes that although they are not designed as scams, they work to attract people. I once won a “cruise” for shopping with my credit card at a supermarket. When I went to “collect the prize”, where there were many other people, it was a scheme to attract people and try to sell them a timeshare. Otherwise I was “letting go” that cruise.

8. The well-known telephone extortion calls that abound in our country. They call to say that they have kidnapped a child, sometimes a girl yells saying “papa” or “mama” depending on who answers. Calls have come into my house from people who say they are from the “Michoacan family” with certain information that unfortunately is sold on the black market. They know my name, address and phone number and they try to intimidate with it. I have to give a fee if I am interested in the safety of my family or if I do not wish to be disturbed. Some are resourceful at extracting information they don’t have but can later use against us.

The best thing in those cases is to hang up immediately and report the incident to 088. Never stay on the line, because as I say, they surround us and seek to extract information from us. If it is a “kidnapping”, try to locate our relative through the mobile phone (our children must have their location activated at all times – technology allows us to have the peace of mind of knowing where they are).

9. Fraudulent investments. The reality is that all over the world, interest rates have dropped a lot and even in some countries of the world, they are negative. But also in countries like ours, people have a very poor financial culture and little access to the formal financial sector. All of this is fertile ground for informal and fraudulent mechanisms. I am talking about pyramid schemes like “the flower” or the “mandala” of abundance, the “friendship wheel”, the “circle of prosperity” and many others that circulate many times on social networks or instant messaging applications.

All these schemes offer to “multiply” the contribution up to eight times in a short time. Doesn’t the possibility of converting 3,000 pesos into 24,000 sound attractive?

They are pyramid schemes that are not viable, because your “profit” comes from the contributions of new recruits. Until it becomes unsustainable and everything falls apart.

However, in Mexico unfortunately there are frequent cases of fraudulent “savings banks”. Nowadays they are regulated, but again the poor financial culture means that people do not bother to check if it is a legitimate institution. There are also cases of identity theft of institutions. Financial authorities issue “alerts” when they find out, but sadly they do not have the operational and financial capacity to stop the many cases that arise every day.

(Fourth and last part)

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Joan Lanzagorta

Coach in Personal Finance


Senior executive in insurance and reinsurance with strategic business vision, high leadership, negotiation and management skills.

He is also a Personal Finance columnist at El Economista, Coach in Personal Finance and creator of the page

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